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Patricia O'Connell
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Kirk Nahra Discusses MLR Final Rule Implications for Anti-Fraud Initiatives

Health Care Fraud Report
December 15, 2011

Privacy Practice chair and Health Care co-chair Kirk Nahra was interviewed by the Health Care Fraud Report on a controversial final rule published December 7 by the Centers for Medicare & Medicaid Services (CMS).  The rule allows anti-fraud programs to continue being excluded as quality improvement activities when insurers calculate their medical loss ratios.

The article reports that the ruling could curb fraud-fighting efforts.  As a result of the rule, anti-fraud programs will not be considered quality improvement activities by insurers and instead will be lumped in with administrative costs, which insurers are only able to spend upwards of 20 percent of premiums on.

"I am very concerned that while, on the one hand the federal government is increasing its own anti-fraud efforts to protect government health care programs, it is taking the opposite approach with private sector programs and issuing a rule that creates disincentives to invest financially and operationally in anti-fraud programs," said Mr. Nahra.  "It is a very bad combination for fighting fraud in private sector programs."

The final rule, Medical Loss Ratio Requirements Under the Patient Protection and Affordable Care Act, is effective Jan. 3, 2012 .